SMRT: A Retail Holiday Play

KONG: A Chinese Momentum Play

PTEC: Going on the Road with SAMSUNG Deal

Can these three gainers today stage comebacks to their recent levels?

Gaining 7% this morning is S&P SmallCap 600 company Stein Mart Inc., (SMRT) http://www.steinmart.com/ currently trading in the $9.86 range. SMRT is a heavily traded stock with broad support between institutions and private investors. SMRT set a 52-week high on 09-22-09 at $13.75.

Can SMRT return to that $13+ level of mid-September? Yes.

SMRT has trailing twelve month revenues of $13.75 billion and though it's been hit hard during the 'great recession' as have most of its competitors, SMRT stores are integral to their communities because of their geographic location (much like monster BigCap Wal-Mart).

I like the management at SMRT because they are acutely aware of moving with the revenues of the times. SMRT closed two stores in September and then turned right around and opened a store yesterday in Scottsdale, Arizona. Follow the money. Being nimble is 'key' in retail top-line growth. SMRT now has 9 stores in AZ (As of January 31, 2009, SMRT operated a chain of 276 off-price retail stores in 31 states and the District of Columbia).       

SMRT sales dropped 9% in September and for the 5-week period totaled $101.9 million compared with $112 million during the period in 2008. Comparable store sales too were down 5.4% in September. SMRT stores from Texas to California performed best while stores in the Southeast continued to perform the worst. SMRT's quarter-to-date and year-to-date sales ended Oct. 3 were also down 10.5% percent and 9% percent, respectively.

This is a literal 'Holiday Play' to me. If the general retail sector climbs during the months ahead, SMRT in the two months ahead could recapture those October and yearly losses. This would be a near-term 'Buy' for me based on SMRT's November store performances and managements ability to take advantage of a fragile consumer. I don't believe however that at its current $9.86 range, it can gain back the $4 necessary to top its 52-week high. That would be a more a short-term play into the Easter season.

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SMRT

Gaining 6% this morning is Kongzhong Corp., (KONG) http://www.kongzhong.com/ currently trading in the $14.39 range. The jump came today on the news the Company will talk about its Q3 2009 earnings on November 11. Anticipation. KONG is a heavily traded stock.

Can KONG return to that $16 level of two weeks ago? Yes.

KONG is a 'darling' of analysts and pundits and shear propaganda could pick up the two dollars needed to top KONG's 52-week high of $16.16 set on 10-20-09. Followers and the faithful note the stock price is 189% higher than last year and that it is one of China's premiere stocks based on the PRC mainland that trades on a U.S. exchange.

Perhaps. I'm neutral on a buy, sell, hold strategy for KONG (for the time being) and this is a 'Watch Closely' stock for me. At this point in time, I would lean however towards a Buy because I do think it will top its 52-week high on press-momentum, and it is deeply embedded and intertwined in China's wireless interactive media markets. But is there money to be made here? Not sure. Not now.

KONG                                                                    PTEC

Gaining 6% this morning is another S&P 600 SmallCap stock, Phoenix Technologies Ltd., (PTEC) http://www.phoenix.com/ currently trading in the $2.26 range. PTEC is also heavily supported by a solid trading base.

Can PTEC return to that $4 level of mid-September? Yes. 

PTEC was downgraded by research house Needham on 10-22-09 from a 'Buy' to a 'Hold' on PTEC's FY 2009 numbers. Total revenues of $67.7 million for FY 09, compared to $73.7 million for FY 08 and a FY 09 net loss of ($75.3 million), or ($2.50) per share, compared to a net loss of ($6.2 million), or ($0.23) per share for FY 08.

On the Road

That would normally send a lot buyers running, but management has taken a course of action and will hit the road to tell their story. The PTEC CEO and CFO will be at the AeA Financial Conference on November 3, drumming up support.

I like this company. PTEC has a unique product in a highly visible sector. In brief, the primary PTEC product is an 'instant-on' computing enhancement that does what it says. Turn on your PC and boom- it's on. No more loading Bios platforms and boot speed dilemmas and the like. Boom- it's on.

I'm not the only one to like PTEC: Samsung has just entered an agreement with PTEC for all Samsung notebook and netbook products. That's a 'Buy' signal for me (especially at its current price). The PTEC product also provides extended battery life. It will top that $4 level in the near-term.

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